Have equity in your home? Want a lower payment? An appraisal from South Shore Appraisals can help you get rid of your PMI.When getting a mortgage, a 20% down payment is typically the standard. The lender's liability is generally only the difference between the home value and the sum remaining on the loan, so the 20% adds a nice cushion against the charges of foreclosure, selling the home again, and natural value changes in the event a borrower doesn't pay. During the recent mortgage upturn of the mid 2000s, it became customary to see lenders commanding down payments of 10, 5 or often 0 percent. A lender is able to endure the increased risk of the reduced down payment with Private Mortgage Insurance or PMI. This additional policy guards the lender in case a borrower doesn't pay on the loan and the worth of the house is less than what is owed on the loan. Since the $40-$50 a month per $100,000 borrowed is rolled into the mortgage payment and often isn't even tax deductible, PMI can be costly to a borrower. Separate from a piggyback loan where the lender consumes all the deficits, PMI is favorable for the lender because they secure the money, and they get the money if the borrower is unable to pay. 
Does your monthly mortgage payment include PMI? Contact us, you may be able to save money by removing your PMI. How can homebuyers keep from bearing the expense of PMI?With the implementation of The Homeowners Protection Act of 1998, on most loans lenders are forced to automatically terminate the PMI when the principal balance of the loan equals 78 percent of the primary loan amount. The law promises that, upon request of the home owner, the PMI must be released when the principal amount reaches just 80 percent. So, smart homeowners can get off the hook ahead of time. Since it can take many years to get to the point where the principal is just 20% of the original amount borrowed, it's important to know how your home has increased in value. After all, every bit of appreciation you've obtained over the years counts towards abolishing PMI. So why pay it after the balance of your loan has fallen below the 80% threshold? Your neighborhood may not be reflecting the national trends and/or your home could have gained equity before things cooled off, so even when nationwide trends predict decreasing home values, you should realize that real estate is local. The difficult thing for most home owners to understand is just when their home's equity goes over the 20% point. An accredited, licensed real estate appraiser can surely help. It is an appraiser's job to recognize the market dynamics of their area. At South Shore Appraisals, we're experts at analyzing value trends in Schererville, Lake County and surrounding areas, and we know when property values have risen or declined. When faced with information from an appraiser, the mortgage company will most often cancel the PMI with little anxiety. At which time, the home owner can delight in the savings from that point on.
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